What is a refinance mortgage?

A refinance mortgage is a mortgage whose proceeds are used to pay off an existing mortgage(s) secured by the home with the cancellation of the existing promissory note(s) and the execution of a new promissory note by the current borrower. The loan to value is based on the appraised value of the subject property regardless of the date the property was purchased and initially financed.

There are typically two types of refinance, rate/term refinance and cash-out refinance, and each accomplishes a different result.

Can I get pre-approved?

Many lenders can "preapprove" you, which qualifies you for a loan by checking your income, credit and other financial data. The preapproval will also indicate the price of a home you are qualified to buy. By getting preapproved, you learn the price range you can afford and the loan amount you qualify for. Also, a lot of the initial legwork is done in advance and you'll be better prepared once you find the home you wish to purchase.